Is a degree really worth it?

If university education is no guarantee of a high-flying career, it risks becoming an expensive finishing school.

by Adam Gale

Published: 11 Oct 2016

Last Updated: 11 Oct 2016

Why did you go to university? Has anyone ever actually asked you that? What a stupid question, you might reply. Of course I went to university. It’s the gateway to a successful adult life and the passport to a remunerative career. I’m not stupid you know...

We have the Americans to thank for that worldview. Across the pond, parents have long scrimped and saved into college trust funds so their kids could get their four formative years in the sun.

Never mind that their beloved offspring actually spent most of that time with their heads stuck in a revolting frat party keg rather than anything as lame as a book, the investment was surely worth it. It’s a rite of passage.

University education has exploded over the last 40 years in this country, to the point that young British people are as likely as young Americans to be graduates. But what if, despite the rise in tuition fees, university was in fact neither a gateway nor even a rite of passage, but simply the final stretch in a very expensive and dysfunctional conveyor belt?

According to research conducted by the CIPD, half of graduates are now doing ‘non-graduate’ - or low to medium skilled – work.

Its study, Alternative Pathways into the Labour Market, found a huge increase in the proportion of workers with degrees across 29 occupations accounting for 30% of graduate and non-graduate employment, without a significant corresponding increase in the skills required for the job.

For instance, over 42% of entry-level police officers below the rank of sergeant are now graduates, compared to 2% in 1979, while 36.9% of new teaching assistants have degrees, compared to only 5.6% as recently as 1999.

Instead, as MT’s upcoming feature on the transformation of graduate recruitment will show (watch this space), apprenticeships are providing a viable alternative to young people who don’t fancy finding themselves £44,000 in debt after three years, when they could have been earning instead.

It is of course highly premature to say that university is no longer a worthwhile investment (and a bit late for those who’ve already been through it). Graduates still earn more, their wage premium hovering at around 20% for those in their early 20s, and rising to 60% for those in their 40s, just as it was decades ago.

But that may be because the most able people (measured if you could by professional potential rather than solely academics) still largely go to university. It could be that if half of the most able people chose a vocational route instead, then the graduate wage premium would disappear.

In truth, it’s likely that for those high-fliers, success can increasingly come from the university route or the vocational route. It’s just that at present there are many more opportunities for them as graduates.

The people who might want to think twice about university are generalists who fall a little further down the ability scale. These are the people statistically more likely to be doing ‘non-graduate’ work despite their degrees, and therefore the people for whom three years’ worth of debt and lost earnings is more likely to outmatch any future earnings premium.

So it comes back to that point oft-repeated at exclusive dinner parties that too many people are going to university. But maybe that’s misguided. For a start, few would argue that the population needs less education per se.

The economy may not have been able to make use of all these extra graduates, but that doesn’t mean it won’t eventually, and we certainly won’t be able to grow more skilled jobs if we don’t have more skilled workers to fill them. Besides, much of the rise in university places has in fact been in vocational courses with specific careers in mind at the end, which tend to have better outcomes.

More importantly, on an individual level, university is for many people a special, broadening experience. It provides the beginnings of independence, an exposure to different people and perspectives, training for critical thinking and the chance to make lifelong friends. And if you’re just being mercenary about it, it can be a wonderful networking tool too.

Ultimately, it must be for young people to decide whether the benefits of university outweigh the costs, or whether the alternatives are preferable.

Apprenticeships – particularly those at a higher level – are increasingly offering just such a viable alternative, and that’s surely a good thing. It’s just unfortunate that with tuition fees as high as they are, it’s likely that the university vs apprenticeship dilemma will be settled for many people by their parents’ income.